Councilmen propose tax relief for Broadway billboards

A City Councilman who is pushing for an overhaul of Manhattan's commercial rent tax has a new bill that he says will protect the Great White Way.

Dan Garodnick, a Manhattan Democrat, will introduce legislation on Wednesday with Councilman Corey Johnson to exempt the rental of Broadway billboards from the commercial rent tax currently imposed on businesses south of 96th Street.

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The tax has long been in place but Garodnick says was not previously collected. But under the de Blasio administration, the finance department began paying attention the tax.

The bill is meant to help production companies, which are already exempt from the tax for one year, by making it less costly for them to advertise their shows, Garodnick said.

"Not every show is 'Hamilton'," he said. "Putting on a Broadway show is highly speculative and many simply do not get off the ground."

Under the legislation, the exemption would last for one year.

"New York City is the theater capital of the world. The theater industry is one of our major economic drivers. It’s also one of the things that makes us special," said Johnson, who also represents Manhattan. "Unfortunately, many of our theaters are struggling to make ends meet. Easing the burden that the commercial rent tax imposes is one of the ways we can help our theaters survive."

The effective tax rate is 3.9 percent of the annual rent.

Garodnick and Councilwoman Helen Rosenthal of Manhattan introduced a separate bill last year that would limit the overall rent tax by raising the income threshold for qualifying businesses from $250,000 to $500,000, while raising it for those paying $3 million or more in rent to 4.2 percent when rent hits $4 million. That legislation is still under negotiation.

"It is a relic of the 1960s and causes obvious harm to economic growth and job creation," Garodnick said.

Thomas Ferrugia, director of legislative affairs for Broadway League, wrote in an email, "The imposition of the commercial rent tax on Broadway signage will have a devastating impact on an industry that supports thousands of jobs and generates millions of dollars for New York City."